EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 4, Problem 8P
a)
Summary Introduction
To determine: Additional financing needed for 2017.
b)
Summary Introduction
To determine: Additional financing needed for 2017.
c)
Summary Introduction
To determine: Additional financing needed for 2017.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
You are a financial Manager of Chevron Corp. You need to assess the effectiveness of
working capital management of the company for 2018 using the following data. What is the
2018 Receivable turnover?
2017 Account Receivable = 15,353 000
2018 Account Receivable = 15.050,00O
2017 Inventory = 5,585.000
2018 Inventory = 5 704.00O
2017 Accounts Payable= 14 565 00I
2018 Accounts Payable = 13 953 000
2017 Sales 134,674 000
2018 Sales 158.902 000.
2017 Cost of Sales = 95 114.000
2018 Cost of Sales = 113 997 000
2017 Purchases= 95 114 000
2018 PurchaSes = 123 435 000
Please help me .... The above figure shows the financial statement of oman's investment copooration the surplus of the profits of the Oman Investment Company over the expenses and costs in the company for a specific period, in general, the cash gains obtained from a deal in 2018. Write an analysis that describes the above figure from the largest ratio to the smallest ratio.
Note : I don't want definitions or rules, just describe what you see
Which of the following statements is correct?
A. a. Since accounts payable and accruals must eventually be paid, as these accounts increase, AFN also increases.
B. b. Suppose a firm is operating its fixed assets below 100 percent capacity but is at 100 percent with respect to current assets. If sales grow, the firm can offset the needed increase in current assets with its idle fixed assets capacity.
C. c. If a firm retains all of its earnings, then it will not need any additional funds to support sales growth.
D. d. Additional funds needed are typically raised from some combination of notes payable, long-term bonds, and common stock. These accounts are nonspontaneous in that they require an explicit financing decision to increase them.
E. e. All of the statements above are false.
Chapter 4 Solutions
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- How would answer this question? You are estimating your company's external financing needs for the next year. Your first-pass pro forma financial statements showed a large financing deficit for next year. Which of the following changes to your company's operating plan would reduce the financing deficit if incorporated in revised pro forma financial statements? None of the options are correct. Increase cost of goods sold as a percentage of sales Increase the dividend payout ratio Increase the sales growth rate Reduce the collection periodarrow_forwardSupposing that the 2022 sales are projected to increase by 25% over the year 2021 sales and that there is proportional relationship between sales to operating costs, interest expenses, current assets and spontaneous liabilities. The company has been operating at full capacity and planned to maintain the dividend ratio and profit margin position of the previous year.Required i. Using the Percentage of Sales proforma method, compute the additional funds needed (AFN), assuming that the company was operating at full capacity in the year 2021. ii. Using the Formula method, compute the additional funds needed, assuming that the company was operating at full capacity in the year 2021.arrow_forwardYou are a financial Manager of Chevron Corp. You need to assess the effectiveness of working capital management of the company for 2018 using the following data. What is the 2018 Inventory turnover? 2017 Account Receivable = 15,353,000 2018 Account Receivable = 15,050,000 2017 Inventory = 5,585,000 2018 Inventory = 5,704,000 2017 Accounts Payable = 14,565,000 2018 Accounts Payable = 13,953,000 2017 Sales = 134,674,000 2018 Sales = 158,902,000 2017 Cost of Sales = 95,114,000 2018 Cost of Sales = 113,997,000 2017 Purchases = 95,114,000 2018 Purchases = 123,435,000arrow_forward
- LONG-TERM FINANCING NEEDED At year-end 2016, total assets for Arrington Inc. were $2 million and accounts payable were $320,000. Sales, which in 2016 were $2 million, are expected to increase by 20% in 2017. Total assets and accounts payable are proportional to sales, and that relationship will be maintained; that is, they will grow at the same rate as sales. Arrington typically uses r current liabilities other than accounts payable. Common stock amounted to $350,000 in 2016, and retained earnings were $280,000. Arrington plans to sell new common stock in the amount of $175,000. The firm's profit margin on sales is 6%; 40% of earnings will be retained. a. What were Arrington's total liabilities in 2016? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest cent. b. How much new long-term debt financing will be needed in 2017? Write out your answer completely. For example, 25 million should be entered as 25,000,000.…arrow_forwardProvide correct solutionarrow_forwardReferring to the following data of the Omani Company, that extracted from the balance sheet at 31122019. answer the following questions: (Note; Write all Equations regarding the questions) 1. The company manager targets to reduce the current ratio in the year (2020) by 33% from the previous year (2019), this requiring to downsize the amount of the total current asset. To what level can the manager reduce the total current asset to achieve this target at (2020)? (Suppose the other things are fixed) 2. The manager put a plan to reduce the selling period in the (2020) by (16.7%) from the previous year (2019). Calculate the new inventory turmover. (Suppose the other things are fixed) Data of 2019 Total Asset Turmover 2 Times Net Fixed Asset 400 (Thousand OMR) 400 (Thousand OMR) 2000 (Thousand OMR) Total Liabilities Sales Quick Ratio 1.5 Times Accounts Receivable 150 (Thousand OMR) 200 (Thousand OMR) Long-term Liabilitiesarrow_forward
- LaAnn Sands wants to conduct revenue breakeven analyses of Salza Technology Corporation for 2013. For 2013, the firm’s cost of goods sold is considered to be variable costs, and operating expenses are considered to be fixed cash costs. Depreciation expenses in 2013 are expected to be fixed costs. Interest expenses in 2013 are expected to be fixed costs. Calculate Salza’s EBDAT breakeven in terms of survival revenues for 2013.arrow_forwardPlease help me .... The above figure shows the financial statement of oman's investment copooration the surplus of the profits of the Oman Investment Company over the expenses and costs in the company for a specific period, in general, the cash gains obtained from a deal in 2017. Write an analysis that describes the above figure from the largest ratio to the smallest ratio.arrow_forwardReferring to the following data of the Omani Company, answer A and B: - (Note; Write all related Equations regarding the questions) 1. The company manager targets to increase the current ratio in the year (2021) by 30% out of the previous year (2020), this requiring to increase the amount of the total current asset. To what level can the manager increase the total current asset to achieve this target (30%) at (2021)? (Suppose the other things are fixed) 2. The manager put a plan to increase the Time interest Earns (TIE) in the (2021) by (17%) out of the previous year (2020) to increase sales. How much will this plan to add amount to the accounts receivable (Suppose the other things are fixed) Data of 2020 Total Asset Turnover 2.5 Times Net Fixed Asset 600 (Thousand OMR) Total Liabilities 500 (Thousand OMR) Sales 2000 (Thousand OMR) Quick Ratio 1.5 Times Accounts Receivable 150 (Thousand OMR) Long-term Liabilities 200 (Thousand…arrow_forward
- Referring to the following data of the Omani Company, answer A and B: - (Note; Write all related Equations regarding the questions) 1. The company manager targets to increase the current ratio in the year (2021) by 30% out of the previous year (2020), this requiring to increase the amount of the total current asset. To what level can the manager increase the total current asset to achieve this target (30%) at (2021)? (Suppose the other things are fixed) 2. The manager put a plan to increase the Time interest Earns (TIE) in the (2021) by (17%) out of the previous year (2020) to increase sales. How much will this plan to add amount to the accounts receivable (Suppose the other things are fixed) Data of 2020 Total Asset Turnover 2.5 Times Net Fixed Asset 600 (Thousand OMR) Total Liabilities 500 (Thousand OMR) Sales 2000 (Thousand OMR) Quick Ratio 1.5 Times Accounts Receivable 150 (Thousand OMR) Long-term Liabilities 200 (Thousand…arrow_forwardAt this point (at the end of 2013), a company's weighted average capital cost (WACC) is 12%, and its corporate tax rate is 25%. The entity's capital flows from 2014 to 2016 are: 1) Obtain the entity's surplus cash flows (FCF) from 2014 to 2016 (Tip: Note that increases in net fixed assets and capital expenditures are not the same concept). 2) After 2016, the FCF is expected to increase by 10% per year for good in 2015. Obtain corporate value after 2016 at the end of 2015. 3) Assuming Question 2) what is the company's equity capital value when the company's debt value is 1,500 at the end of 2013? If the total number of shares issued by the company is 100, what is the intrinsic value per share? 2014 2015 2016 sales 200 250 320 cashable operating expenses 80 85 90 depreciation cost 20 25 30 increase of net working capital 10 15 20 increase of net fixed asset 40 50 60arrow_forwardSee Table 2.5 E showing financial statement data and stock price data for Mydeco Corp. Suppose Mydeco had purchased additional equipment for $12.1 million at the end of 2013, and this equipment was depreciated by $4 million per year in 2014, 2015, and 2016. Given Mydeco's tax rate of 25%, what impact would this additional purchase have had on Mydeco's net income in years 2013-2016? (Assume the equipment is paid for out of cash and that Mydeco earns no interest on its cash balances.) Hhing is the Calculate the new net income below: (Round to one decimal place.) (millions) Year 2013 2014 2015 2016 question Net Income 2$ $ 2$ 2$ Additional Depreciation $ 2$ $ $ Tax Savings 2$ 2$ 2$ 2$ New Net Income $4 2$ 2$ tables Data Table 2012-2016 Financial Statement Data and Stock Price Data for Mydeco Corp. (All data as of fiscal year end; in $ millions) Total Current Assets 165.8 170.2 183.6 190.5 215.9 Income Statement 2012 2013 2014 2015 2016 313.4 346.6 Net Property, Plant & Equipment Goodwill…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning
Financial Planning & Forecasting - Spreadsheet Modeling; Author: Pat Obi;https://www.youtube.com/watch?v=dn8vTk0eaBg;License: Standard Youtube License